Obama’s second choice to run Commerce Dept. withdraws

WASHINGTON – Sen. Judd Gregg of New Hampshire abruptly withdrew Thursday as the nominee to be commerce secretary, saying he had “irresolvable conflicts” with President Barack Obama over his economic stimulus plan and a concern over what many fellow Republicans believe is the politicization of the 2010 census.

The departure of Gregg is the latest setback to a White House that has struggled to fill several top positions and fulfill the president’s pledge to build a bipartisan administration. He is the third prospective Cabinet secretary – the second at the Commerce Department – to remove his name from consideration.

“I’m a fiscal conservative, as everybody knows, a fairly strong one,” Gregg, a Republican, told reporters at an afternoon news conference in the Capitol. “And it just became clear to me that it would be very difficult, day in and day out, to serve in this Cabinet or any Cabinet.”

“It was my mistake, obviously, to say yes,” he added.

But the political fallout is left to the White House, which now has a string of appointees who have stepped aside over vetting problems, unpaid taxes or philosophical differences with Obama. Since the president took office last month, not a week has gone where the White House has not found itself responding to a personnel crisis.

Gregg said he alerted the president to his decision “several days ago,” but several administration officials said the senator’s withdrawal took them off guard.

The White House sought to contain the political fallout from losing another high-level appointee, issuing a terse statement and pointing out that Gregg had pledged to “support, embrace and move forward with the president’s agenda.”

Obama, who was traveling in Illinois, told reporters that he had spoken to Gregg on Wednesday, but he had not known that Gregg intended to withdraw until Thursday. He said Gregg had had a “change of heart,” but added that he intended to keep his pledge to have a bipartisan Cabinet.

“I am going to keep working at this,” Obama said, noting that the American people are “desperate” for Democrats and Republicans to work together.

The Obama administration was mum Thursday on who might be in the running to fill the post. But before Gregg’s nomination, sources said Symantec CEO John Thompson was a leading candidate. Thompson, one of the few black chief executive officers in the nation, was a prominent Obama supporter who is stepping down from his post in April.

The appearance by Gregg at his news conference in the Capitol was one of the few times he had been seen in public all week. Senators assumed that he was preparing for his confirmation hearings, but he was huddled with his wife, Kathy, and a small circle of advisers trying to determine how he could undo his decision last week to join the Obama administration.

He did not vote on the administration’s $789 billion economic stimulus plan the first time it came up in the Senate. He declined to tell reporters Thursday how he would vote on the bill when it comes before the Senate for final passage, but he signaled his disagreement with the policy by criticizing the plan in his withdrawal statement.

“It has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me,” Gregg said. He added, “We are functioning from a different set of views on many critical items of policy.”

The White House signaled last week that it would exert greater control over the Census Bureau, in part because of a concern among minority groups over Gregg leading the Commerce Department. Then, in response to complaints by Republicans, the administration said it would work closely with the director of the census, but it would not be under the direction of the White House.

The roster of fallen cabinet nominees also includes Tom Daschle, who stepped aside last week as the nominee for health and human services secretary because of questions about unpaid taxes, and Gov. Bill Richardson of New Mexico, who withdrew from consideration as commerce secretary because of an investigation into state contracts.

Mr. Obama’s choice for chief performance officer, Nancy Killefer, pulled her name from consideration because of unpaid payroll taxes for a household employee. Gen. Anthony C. Zinni was offered the position of ambassador to Iraq, but the opportunity was retracted.

Mr. Gregg will remain in the Senate and said he would help Mr. Obama accomplish some pieces of his agenda, like reworking Social Security. “I do believe, genuinely, that I can be even more effective for this presidency in the Senate,” Mr. Gregg said.

Mr. Gregg added that he would not seek re-election to a fourth term in 2010, making him the fifth Republican senator to announce plans to retire next year.

Rahm Emanuel, the White House chief of staff who had been a strong proponent of Mr. Gregg’s nomination, sought to play down his decision to withdraw. “It is better that it happened now,” Mr. Emanuel said, “than when you have someone in the government.”

Among the responsibilities facing the next commerce secretary is oversight of the government’s multibillion-dollar rescue of Chrysler and General Motors, the struggling Detroit automakers.

Senator John D. Rockefeller IV, a West Virginia Democrat who is the chairman of the Commerce Committee, said he wished that Mr. Gregg had “thought through the implications of his nomination more thoroughly before accepting this post.”

Later in the day, Mr. Gregg said the census had been “only a slight issue” in his decision to withdraw. But the census has been a major issue between Republicans and Democrats for years, and Mr. Gregg has been involved in the dispute. A decade ago, he resisted efforts by President Bill Clinton to increase financing for the 2000 census.

In recent days, Republicans have been upset by suspicions that the Obama administration sought to assert more direct control over the census, a prospect they called troubling given that the president’s chief of staff, Mr. Emanuel, is a former Democratic congressman who helped his party win a majority in the House.

“We respectfully request that you reconsider and reverse your administration’s plans to transfer control of the Census Bureau and the 2010 census to the White House staff,” the House Republican leader, John A. Boehner of Ohio, wrote Thursday in a letter to the president.

The census has huge implications social and political. It is used to distribute federal money to states and cities based on population, and to redraw Congressional districts – determining how many seats in the House that growing states will pick up at the expense of states with relatively stagnant populations.

White House officials said they did not have any leading contenders for commerce secretary. It could be difficult, they feared, to attract a strong candidate who would be the third person selected for the post.

The administration did get one key position filled Thursday when the Senate, by voice vote, confirmed Leon E. Panetta to run the Central Intelligence Agency.

Jackie Calmes and David Stout contributed reporting from Washington, and Helene Cooper from East Peoria, Ill.